FarmPolicy

July 16, 2019

Transition (Ag. Sec. Vilsack?), and Trade Issues / Economic Summit

Transition

David Cho, Michael D. Shear and Michael S. Rosenwald reported in Saturday’s Washington Post that, “With fresh evidence that the U.S. economy is shedding jobs even faster than expected, President-elect Barack Obama said yesterday that his top concern is passage of a multibillion dollar stimulus package to create jobs.

“In his first news conference since winning the presidency, Obama said he would tackle the nation’s financial crisis ‘head on’ and called on Congress and the White House to approve a stalled stimulus plan that could include money for new public works projects and aid for the nation’s teetering automakers. If it does not get passed soon, he said, ‘it will be the first thing I get done as president of the United States.’”

From an international perspective, Andrew Batson reported in today’s Wall Street Journal that, “China unveiled an economic stimulus program it billed as totaling $586 billion, aiming to bolster domestic demand and help avert a global recession.

“Though the two-year package appeared to include some previously announced measures, its size was clearly designed to revive the fading confidence of Chinese businesses and consumers, and impress foreign governments. Asian shares rallied sharply early Monday on the Chinese announcement, with benchmark stock indexes in Tokyo, Hong Kong and Shanghai all jumping close to or above 5% in the early hours of trading.”

Peter Baker noted in Saturday’s New York Times that, “With the economy in disarray and the nation’s treasury draining, President-elect Barack Obama and his advisers are trying to figure out which of his expansive campaign promises to push in the opening months of his tenure and which to put on a slower track.

Mr. Obama repeated on Saturday that his first priority would be an economic recovery program to get the nation’s business system back on track and people back to work. But advisers said the question was whether they could tackle health care, climate change and energy independence at once or needed to stagger these initiatives over time.

“The debate between a big-bang strategy of pressing aggressively on multiple fronts versus a more pragmatic, step-by-step approach has flavored the discussion among Mr. Obama’s transition advisers for months, even before his election. The tension between these strategies has been a recurring theme in the memorandums prepared for him on various issues, advisers said.”

With respect to Congress, Paul Kane and Lori Montgomery reported in yesterday’s Washington Post that, “Democratic leaders in Congress plan to delay consideration of a number of expensive campaign promises, including proposals to reform the nation’s health-care system and fund a strategy to reduce U.S. dependence on foreign oil, instead placing top priority on attempts to spark the staggering economy.”

Yesterday’s Post article explained that, “Democrats want to increase spending on roads, bridges and other public works projects, which they say would quickly create jobs or prevent layoffs in the nation’s construction trades. Democrats also want to invest in ‘green infrastructure’ — such as public transportation, renewable energy sources and the retrofitting of public buildings to consume less energy — to both stimulate job growth and reduce future dependence on foreign oil.

“Republicans have dismissed the proposals as big-government initiatives that would do little for the economy. ‘Families and small businesses are hurting, and we need to be careful not to adopt policies that will only deepen their pain. The American people believe cutting taxes for families and small businesses is more likely to ‘stimulate’ the economy than increasing government spending on programs,’ House Minority Leader John A. Boehner (R-Ohio) said in a statement released Friday.

“If Bush declines to endorse a stimulus package before he leaves office, Democrats would add expanded unemployment benefits and additional funding for food stamps [or SNAP] to the January effort once Obama is sworn in as president.”

Meanwhile, Greg Hitt reported in today’s Wall Street Journal that, “A fight is intensifying over whether Democratic Rep. John Dingell should continue to head the powerful Energy and Commerce Committee, fraying unity among House Democrats soon after they widened their majority in the chamber.

“Rep. Henry Waxman of California said the day after the Nov. 4 election that he would challenge Mr. Dingell for the chairmanship. The fight is forcing rank-and-file Democrats to choose sides, and underscores the tensions within the Democratic caucus on high-profile issues such as climate change.”

Mr. Hitt noted that, “The tiff threatens to distract House Democrats from implementing the policy goals of President-elect Barack Obama and their party. ‘Congressional committee battles can be more vicious than presidential elections, and can leave lasting scars that can directly affect a president’s program,’ said Larry Sabato, a political-science professor at the University of Virginia.”

And Mary Pat Flaherty indicated in Saturday’s Washington Post that not all of the election results from Tuesday have been finalized yet: “The U.S. Senate race in Minnesota is nowhere close to being decided, state officials said yesterday.

“The recount in that election will not be completed until mid-December, and even then, a candidate or voter can challenge the outcome, Secretary of State Mark Ritchie said. Sen. Norm Coleman (R) held a 239-vote lead over Democrat Al Franken as of late yesterday. That margin of less than 0.5 percentage points triggers an automatic recount under Minnesota law.”

The Post article added that, “Two other U.S. Senate races also remain unresolved. Georgia will hold a runoff between Republican incumbent Saxby Chambliss [Ranking Member of the Senate Ag Committee] and Democrat Jim Martin. Chambliss fell just short of the 50 percent mark in Tuesday’s voting. A result is still pending in Alaska, where Sen. Ted Stevens (R) ran for reelection against Anchorage Mayor Mark Begich (D) despite his felony conviction last month of failing to report gifts.”

***

More specifically with respect to the transition and agriculture, Philip Brasher noted in yesterday’s Des Moines Register that, “There’s no need for Obama to change course on farm policy either. Congress enacted a new farm bill that the Illinois senator supported, and all that’s left for his administration is to implement whatever programs Bush’s Agriculture Department doesn’t get to.”

Mr. Brasher added that, “Then there’s trade. While running for the Democratic nomination, Obama pledged to reopen the North American Free Trade Agreement, or NAFTA, but agribusiness interests are betting that was campaign rhetoric. The agreement has been a boon for a range of farm commodities, including grain and beef.”

As the executive branch transition unfolds, attention has focused on who might by the next Secretary of Agriculture.

Al Kamen noted in today’s Washington Post that, “The Obama transition team considers former Iowa governor Tom Vilsack a near shoo-in for secretary of agriculture, according to a source close to the transition. Vilsack, who dropped out of the presidential race last year after a short-lived bid, was an early backer of Sen. Hillary Rodham Clinton. But during the general election, he campaigned hard for Obama in Iowa.

“Vilsack is well-liked by both environmentalists and food industry leaders, the source said. In a sign that he is actively seeking the job, Vilsack has written opinion articles in recent weeks about agriculture policy, linking farming to energy independence and national security.

“Should things not work out with Vilsack, Obama might turn to Rep. Collin C. Peterson (D-Minn.), chairman of the House Agriculture Committee.”

Interestingly, a student newspaper publication from Macalester College (St. Paul, Minn.) called “The Mac Weekly,” featured a Q and A with former Gov. Vilsack in a recent edition.

The Mac Weekly article stated that, “Former Democratic Governor of Iowa Tom Vilsack came to campus Oct. 31 to speak on the topic of ‘Confronting Climate Change: What Voters Need to Know.’ Before his lecture he sat down with The Mac Weekly to answer questions about ethanol, politics and the possibility of a Cabinet appointment.”

The article included this exchange: “What do you think the next agriculture secretary’s next priorities should be, whether it’s you or somebody else?

“[Vilsack] Well, I will tell you that it’s a department that impacts every American. Where do you start? You have an international food crisis. Sen. Obama has talked about the use of soft power, and that would be an opportunity to address in a significant way a new day in America, a new approach.

“You’ve got renewable energy, which the secretary of energy obviously is going to be involved in, but the secretary of agriculture is also going to be involved in it. How do you accelerate the research and development that gets you to second-generation bio-fuels?

“You have the reauthorization of the school nutrition program. You have to be focused on whether we are doing right by our children in schools across America in terms of nutritious food that we subsidize and we provide in school lunch programs.”

Vilsack also added that, “There is an issue of food security and food safety. We have an odd system in America. The USDA [United States Department of Agriculture] basically takes a look at meat, poultry and fish, I think, in terms of protecting it-the safety and security of it-but you have the FDA, the Food and Drug Administration, providing safety and security of every other type of food product. Well, is there overlap? Is there inconsistency in the way these folks inspect plants and facilities? Should there be some coordination? Should there be some consolidation? So that’s an issue that will have to be addressed.”

And later, while answering a question on the issue of corn ethanol, Vilsack indicated that, “There isn’t going to be enough corn to produce the kind of demand that we’re going to have for ethanol. So you’ve got to transition away from corn for cellulosic ethanol, and that’s wood chips, that’s waste, that’s grasses, that’s crop residue, it’s a series of things that currently have little value but could-if we do it right-have significant value and can help produce a series of jobs, which this economy clearly needs. So as the research gets us to the point where we can produce cellulosic ethanol efficiently and in a cost effective way, what we’re going to see is a shifting of those subsidies and that assistance [to cellulosic ethanol]. And then overtime, as that industry matures, there will be a need for ratcheting down the subsidies because the market will take over and there will be an opportunity for additional profits from the market the way it ought to be.”

Philip Brasher, writing last week at The Des Moines Register’s Cash Crops Blog, pointed out that, “There’s a lot of buzz in D.C. about former Iowa Gov. Tom Vilsack becoming the next agriculture secretary. He would appear to meet the requirements of Farm Bureau president Bob Stallman. Meeting with reporters today, Stallman said Obama’s administration ‘would be best served by those who have ‘experience in governing and balancing competing interests. … That’s really what a lot of the job is about, balancing competing interests.’

“Stallman wouldn’t discuss particular prospects for the job but when asked about Vilsack, he would only say that he’s the ‘type of individual, governor, past member of Congress, people who have had experience running things.’”

And current Secretary of Agriculture Ed Schafer does not appear inclined to follow in his predecessor’s food steps with a bid to run for the U.S. Senate.

An item posted last week at KXMBTV (Bismarck) Online stated that, “Schafer says he is not sure what his political future holds.

“His name has been in the conversation for the 2010 race against Senator Byron Dorgan.

“However, Schafer says he is not interested in running for a spot in the legislative branch of government.

“(Ed Schafer/ US Secretary of Agriculture) ‘I am an executive branch type person. I am an administrator a manager that works. It doesn’t work in the legislative side of things. You know I had a lot of interaction with the senate now since I have been a Secretary of Agriculture. Now more than ever I know I don’t want to be a senator.’”

Trade Issues / Economic Summit

A news release issued on Friday by the American Farm Bureau Federation stated that, “The American Farm Bureau Federation today said a new approach is needed in world trade talks, citing the stalled Doha round of negotiations. AFBF President Bob Stallman said his organization will shortly begin discussions with domestic and international business and trade leaders in an effort to find a new way to move forward.”

The news item added that, “‘It is imperative during this ‘pause’ in the WTO talks that we develop a new format that allows like-minded countries that want to move ahead to do so and I think that can be done within the WTO. We’re not advocating trying to supplant the WTO because it is a rules-based trading system that exists and that works,’ said Stallman.”

A Reuters news article from Friday (via DTN, link requires subscription) reported that, “[Stallman] said an overhaul of the framework for negotiating trade agreements could end stalemates on pacts. The World Trade Organization operates by consensus in trade talks.

“‘We’ve got too many countries that are not interested in increasing trade flows. That’s the problem,’ he said. A two-tier system would allow motivated nations to write agreements on topics of interest.”

***

Alan Beattie and Krishna Guha reported on Friday at the Financial Times Online that, “The summit of the world’s leading countries next weekend is unlikely to produce radical change in the way the global economy is governed, according to the head of the International Monetary Fund.

“Comparisons between the November 15 summit and the Bretton Woods conference in 1944 which created the fund were overblown, said Dominique Strauss-Kahn, the IMF’s managing director. The most the summit could achieve would be to bring together analysis already done and set working groups in motion for agreements further down the line, possibly in six months or so.”

The FT article noted that, “Mr Strauss-Kahn’s tone stands in contrast to that of European leaders, notably Gordon Brown, the British prime minister, and Nicolas Sarkozy, the French president.

European Union leaders reiterated their view on Friday that the summit of the Group of 20 leading economies, to be held in Washington DC, should aim to bring about significant breakthroughs and new powers for the IMF.

“But it chimes with the view of the outgoing administration of George W. Bush, the US president, which has said the summit is unlikely to take important binding decisions.”

Dow Jones writers Alastair Stewart and Jeff Fick reported on Saturday that, “Developing countries must be allowed to take a more active role in global financial institutions, Brazilian President Luiz Inacio Lula da Silva said Saturday.”

The article added that, “[Lula] also said that the world’s economies can’t resort to protectionism and now would be a good time to reach agreement in the Doha round of world trade talks.

“‘(Agreement in the Doha talks) becomes a necessity in the current situation … We have to resolve the few problems that we have (to get a deal),’ said the Brazilian president.”

Joshua Partlow reported in today’s Washington Post that, “Financial leaders from 20 of the world’s largest economies delivered a message Sunday that governments need to act faster and be ready to cut interest rates or increase spending in order to fortify ailing world markets.

“‘We are in extraordinary times, the global economy is facing shocks which are wholly without precedent and we need a new approach,’ said Stephen Timms, Britain’s treasury secretary. ‘It is a global crisis. It therefore requires an international response. And the first priority needs to be urgent action to stabilize the financial sector.’

While short on specifics, the Group of 20’s two-day conference in Sao Paulo laid out a set of principles ahead of a meeting among the nations’ heads of state in Washington later this week. Among them: the need for more financial market regulation and coordinated government action, and the importance of giving smaller, emerging market economies more voice in how to resolve the crisis.”

And C. Randall Henning noted on Friday at the Peterson Institute Blog (“Recipe for a Successful G-20: Preparation, the Right Actors, and Political Sensitivity”) that, “The impending Group of 20 summit in Washington, DC, November 14–15, organized to discuss solutions to the economic crisis and reforms to the international financial architecture, is potentially the most important international economic meeting in a very long time. However, it has been hastily convened, insufficiently prepared, and President-elect Barack Obama will not participate. To make this meeting and those that will follow successful, officials of the Bush administration and other governments should heed six key principles for successful international negotiations. The Obama team should also reflect on them as it prepares to take office.”

After outlining the principles regarding the negotiations, the update stated that, “President-elect Obama’s reluctance to attend the G-20 summit meeting next week is understandable. The last meeting he attended that was convened by President Bush to address the financial crisis—which occurred as Congress was about to consider the administration’s $700 billion rescue package in September—was nearly a complete disaster. The President-elect will not set the agenda for next week’s meeting but he must keep his options open and his powder dry for after the inauguration. Whether or not he is present at the meetings, he should plan to endorse the attention to immediate measures needed to respond to the crisis, as well as the planned launch of additional sessions to address the details of a new international financial architecture.”

Keith Good

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